Tigermed's order momentum is progressing as planned, with pricing and margins beginning to recover

Overview

This report is Goldman Sachs' conference note following Tigermed's participation in the 2026 China Healthcare Corporate Day. The key information comes from company management, especially feedback from the vice president of finance: domestic order growth remains at about 20%, momentum improved in April-May; pricing has shown early signs of stabilization; and margins are on a gradual recovery track as utilization, operating leverage, and AI efficiency improve.

Core views

The main thesis of the report is simultaneous marginal improvement in orders, pricing, and margins. Demand from domestic pharmaceutical companies is stronger, while specialty pharma companies' transition toward innovative drug development is driving higher outsourcing penetration, and MNC project activity in China has started to recover. Overseas, after ASCO, conversion rates among small and mid-sized U.S. biotech clients have been relatively high, while global CRO capacity constraints and pipeline advancement following large pharma M&A are creating incremental clinical outsourcing demand.

Analysis framework

The analysis is primarily based on management meeting feedback, combined with assessments of order growth, ASP changes, customer mix, regional expansion, margin guidance, AI investment, geopolitical policy impact, and valuation framework. For valuation, the A-share uses SOTP, with the core business valued using a 10-year DCF and investment assets at book value; the H-share target price is based on a 38% discount to the A-share.

Methodology notes

• Valuation methodsSOTP/DCF

  Sum-of-the-parts valuation and 10-year DCF

  The A-share target price of Rmb65.0 consists of Rmb48.4 for core operations and Rmb16.6 for investment assets. The core operating value is derived from a 10-year DCF, while investment assets are measured at book value.

• Valuation methodsH-share discount method

  Discount relative to A-shares

  The H-share 12-month target price of HK$51.4 is based on a 38% discount relative to the A-share.

• Factor frameworkGS Factor Profile

  Growth, Financial Returns, Multiple, and Integrated

  This framework uses standardized rankings of metrics such as growth, financial returns, and valuation multiples to compare a stock's investment characteristics versus the market and industry peers.

• M&A assessmentM&A Rank

  Potential acquisition probability score

  Goldman Sachs uses a three-tier M&A ranking to assess the likelihood that a covered company could become an acquisition target, with 1 representing high probability and 3 representing low probability.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Tigermed (H) 3347.HK

  Core covered H-share

  Strengths

  Improving domestic order momentum, recovering MNC projects, solid overseas demand conversion, and margins entering a gradual recovery phase.

  Weaknesses

  Some services still face pricing pressure, and investment income may fluctuate due to fair value changes.

  Comparison

  The H-share target price is set at a 38% discount relative to the A-share, reflecting cross-market valuation differences.

  Risks

  Tighter geopolitical regulation, continued order weakness, weak front-end demand and investment, slower-than-expected global expansion, and delayed industry consolidation.

• Tigermed (A) 300347.SZ

  Core covered A-share

  Strengths

  In the A-share valuation framework, both the DCF value of the core business and the value of investment assets support the target price.

  Weaknesses

  Earnings recovery still depends on order delivery, price stabilization, and continued utilization improvement.

  Comparison

  The A-share 12-month target price is Rmb65.0, above the disclosed price of Rmb43.38.

  Risks

  Same as H-shares, with additional attention needed on investment asset exits, the A-share IPO environment, and fair value volatility.

Key data

• Report date2026-06-25The report was published at 5:31PM HKT on 25 June 2026.
• Domestic new order growthabout 20% YTDManagement said domestic new orders grew by about 20% from January to May 2026.
• April-May order momentumabout 20%-25% growthAfter weakness in January-February, order growth recovered in April-May.
• Pricing recoveryASP improvement below 10%, weighted average increase of about 5%This indicates early signs of stabilization on the pricing side.
• MNC projectsabout 5 projects expected in 2HStrategic cooperation agreements have improved visibility on project flow, mainly in early-stage clinical trials.
• U.S. team sizeabout 150 peopleRevenue from the U.S. team was slightly below RMB200mn.
• Adjusted net profit guidanceRMB600-700mnThis guidance includes about RMB200mn of AI investment.
• A-share target priceRmb65.0Including Rmb48.4 for core operations and Rmb16.6 for investment assets.
• H-share target priceHK$51.4Based on a 38% discount relative to A-shares.

Impact & implications

If order growth, pricing recovery, and margin improvement continue to materialize, Tigermed's earnings recovery path will become clearer. AI investment will increase costs in the short term, but is expected to offset some pressure in price-sensitive services such as medical writing and translation through efficiency gains. Geopolitical policy has not yet changed customer behavior, but remains a key variable affecting global clinical trial demand and valuation discounts.

Risks

• The U.S. or other regions may impose stricter regulatory scrutiny or higher fees on Chinese clinical trial data.
• Orders may continue to weaken or recover less than expected.
• Front-end R&D demand and the investment and financing environment may remain weak.
• Global expansion may be slower than expected.
• Industry consolidation may lag expectations.
• Investment income may fluctuate due to fair value changes.

What to watch

• Whether the April-May order improvement can continue into the second half.
• Whether the roughly 5% weighted average ASP increase represents sustained pricing recovery.
• The execution of about five MNC projects in 2H.
• Whether non-IFRS margins continue to improve in 3Q-4Q.
• Whether AI investment can deliver efficiency gains in services such as medical writing and translation.
• Whether U.S. FDA-related policies and geopolitical risks begin to affect customer behavior.